Correlation Between Aeye and Marchex
Can any of the company-specific risk be diversified away by investing in both Aeye and Marchex at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Aeye and Marchex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeye Inc and Marchex, you can compare the effects of market volatilities on Aeye and Marchex and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Aeye with a short position of Marchex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeye and Marchex.
Diversification Opportunities for Aeye and Marchex
Very weak diversification
The 3 months correlation between Aeye and Marchex is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Aeye Inc and Marchex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marchex and Aeye is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Aeye Inc are associated (or correlated) with Marchex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marchex has no effect on the direction of Aeye i.e., Aeye and Marchex go up and down completely randomly.
Pair Corralation between Aeye and Marchex
Given the investment horizon of 90 days Aeye Inc is expected to generate 1.4 times more return on investment than Marchex. However, Aeye is 1.4 times more volatile than Marchex. It trades about -0.01 of its potential returns per unit of risk. Marchex is currently generating about -0.04 per unit of risk. If you would invest 114.00 in Aeye Inc on August 29, 2024 and sell it today you would lose (7.00) from holding Aeye Inc or give up 6.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aeye Inc vs. Marchex
Performance |
| Timeline |
| Aeye Inc |
| Marchex |
Aeye and Marchex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeye and Marchex
The main advantage of trading using opposite Aeye and Marchex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeye position performs unexpectedly, Marchex can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Marchex will offset losses from the drop in Marchex's long position.| Aeye vs. Innoviz Technologies | Aeye vs. Luminar Technologies | Aeye vs. Hesai Group American | Aeye vs. Mobileye Global Class |
| Marchex vs. Entravision Communications | Marchex vs. Direct Digital Holdings | Marchex vs. Cimpress NV | Marchex vs. Townsquare Media |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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